Assembly Supports Conditional Veto of Economic Opportunity Act

Senate expected to concur as well in upcoming session, but questions remain as to whether bill can truly transform state's stalled business climate.

Assemblyman Al Coutinho (D-Newark)

Fourteen months to the day after first introducing A-3680, Assemblyman Al Coutinho (D-Newark) welcomed the passage of legislation he calls the most significant overhaul to the state’s business incentives in legislative history.

"We’ve spent a lot of time crafting this bill, and while no bill is perfect, when all is said and done we’ll have reformed economic development incentives to make them more effective, kept jobs in the state, helped small businesses, set in motion plans to bring more jobs into New Jersey and ensured economic growth occurs in all areas of the state, including places where development has been stagnant for years,” he said in a statement.

Several hours after Gov. Chris Christie issued an expected conditional veto of the bill, members of the Assembly consented to the conditional veto and passed the legislation by a vote of 70 to 6. John McKeon (D-Madison) was the only dissenting Democrat; the remaining five were Republicans. Coutinho characterized them as leaning Libertarian who frequently vote against bills that continue or expand the government’s taxation practices.

“This act is really just corporate welfare aimed at a select few,” said Jay Webber (R-Parsippany) minutes after the vote. “What we need is broad-based tax relief aimed at everybody . . . not just those who can afford to hire lobbyists.”

The Senate is expected to consent to the governor’s conditional veto during a scheduled vote on Thursday afternoon, in spite of the fact that primary sponsor Raymond Lesniak (D-Union) is disappointed that after more than a year of behind-the-scenes debate, the final bill contains what he believes to be untenable affordable housing requirements for developers who would have liked to take advantage of the new incentives to build in small, lower-income cities like Trenton, Camden and Passaic.

As anticipated, Christie did not veto the affordable housing provision and instead vetoed two others yesterday morning: one that awarded tax credits to hospital redevelopment projects and another that mandated a prevailing wage for building-services employees in facilities housing offices that receive program credits.

"With these minor, but important, modifications incorporated, I look forward to swiftly signing this bill," Christie wrote in his veto message to legislators.

Focusing instead on what the bill does include rather than what it doesn’t, Coutinho summarized that in his view, it accomplishes three main goals. First, it consolidates five existing incentive programs into two. Second, by arming the job-growth program with powerful tools to compete with neighbhoring states, it changes the focus of the programs from capital investment to job creation and expands their reach to include more small and medium companies. Finally, it incorporates smart-growth philosophies in determining areas targeted for development.

More specifically, the act preserves the Grow New Jersey Assistance Program, which rewards companies for creating and retaining jobs (particularly in certain high growth-potential sectors like aviation) and the Economic Redevelopment and Growth Grant Program, which incentivizes redevelopment of aging urban centers, suburban office parks, transit hubs, and the like.

The programs also expand eligibility to a wider geographic area and to small- to medium-sized companies while favoring those newly locating in New Jersey over those seeking to relocate within its borders.

In addition, the programs lower eligibility thresholds for certain types of businesses building in the state’s most impoverished cities, Sandy-ravaged areas, and in all eight South Jersey counties. The South Jersey bonuses threatened to derail approval of the bill for a time earlier this year but ultimately north Jersey opponents acquiesced

It’s unusual for a legislative body to so quickly consent to a conditional veto -- and indeed, there was no floor debate before yesterday’s vote -- but Coutinho said that’s a testament to the fact that he and his co-sponsors in both houses have spent months exhaustively vetting the bill and compromising with stakeholders, the governor, and skeptical members of their own caucuses. By yesterday’s vote, there were no surprises.

“The situation is somewhat strange,” Coutinho said, “but we knew the conditional veto was coming, and that shows the level of cooperation [involved in moving this bill].”

Calling himself “disappointed, not surprised,” at the conditional veto, Coutinho added, “We can’t let the perfect be the enemy of the good,” and predicted that members of the Assembly will work on using the upcoming lame duck session to move separate prevailing wage legislation.

However, New Jersey Policy Perspective, a nonprofit think tank that has been critical of the legislation, released a statement denouncing the governor for removing the prevailing wage section. "There were plenty of ways the governor could have used his veto pen to make this reform of New Jersey's business tax subsidy programs stronger, smarter and more effective. Instead, he used his veto power to remove one of the few positive elements of the legislation: a prevailing wage standard that would have ensured that the New Jersey tax dollars invested in these subsidy projects help a wider array of workers. What the governor has done is take a bad piece of legislation and make it even worse," wrote president Gordon MacInnes.

The small-government Americans for Prosperity distributed its own release, this one applauding Christie for striking prevailing wage but castigating him for failing to veto the entire bill. “New Jersey is not miraculously going to see jobs created just because we’re offering a better deal than the next state. New Jersey’s terrible business climate is not going to suddenly improve because a select few received a break at the expense of the many,” wrote deputy state director Daryn Iwicki. “The fact of the matter is Trenton’s big-government policies are killing jobs and resulting in economic malaise.”

Before and after the vote, Coutinho spent most of his defensive efforts attempting to counter an argument put forth by the environmental preservation community that decries the bill’s failure to de-incentivize companies that encroach on eco-sensitive lands.

As written in a statement by New Jersey Sierra Club Director Jeff Tittel, “There are projects that would never happen without this bill. This bill targets rural areas, farmland and environmentally sensitive lands because they could never get the financing or the costs of bringing in infrastructure like sewer lines would be too expensive. . . . This bill is a threat to the Highlands, Pinelands, and our drinking water.”

However, Coutinho repeatedly told reporters yesterday that the bill does not allow developers to legally access any land not previously available to them.

He also accepted the congratulations, thanks and well-wishes of colleagues who learned over the weekend that he will not be seeking re-election. This spring, the 44-year old suffered from cardiac arrest as he tried to gather consensus for the bill among his members and push it to a vote.